Special Feature

A guide to investing in Japan:

/ EdgeProp Singapore |

July 27, 2023 6:00 AM SGT

FMI COO and partner Nicky So (left) with FMI CEO and founding partner Amous Lee. (Picture: FMI Japan)

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FMI is your trusted partner for international property acquisition and divestment in the Land Of The Rising Sun

The Japanese real estate market’s stellar performance has attracted opportunistic investors in recent years. With its resilient and robust fundamentals, Japan’s real estate markets are a magnet for foreign investment in top-notch residential and commercial assets.

However, unfamiliarity with the complexities of the domestic market can intimidate some solo investors. Some may need help finding the right assets that suit their risk appetite, investment strategies, and budget.

It is thus important to partner with a comprehensive real estate investment company like FMI Japan which specialises in facilitating the investment journey for individuals, developers, and fund managers.

FMI Japan is a subsidiary of FM Investment (FMI), an international consulting and real estate agency specialising in providing dedicated end-to-end services. Since its inception in 2015, the company has diversified into property development, project investment, and real estate management.

FMI was founded in Singapore and is led by its co-founders, CEO Amous Lee and the company’s chief operating officer Nicky So. Both men are industry veterans with a combined experience of more than 30 years navigating diverse international real estate markets.

On the residential leasing front, key cities like Tokyo and Osaka are returning to normalcy after a rent correction following a relatively large number of completed projects.

Japan was one of the first countries that FMI moved to establish itself more than nine years ago. Today, the company is a trusted partner for many international clients looking to acquire and divest Japanese properties.

Within its range of property expertise, FMI Japan has developed a speciality in identifying budding real estate investment opportunities throughout key Japanese cities and identifying assets that demonstrate appreciation potential.

This strength comes from its teams on the ground who keep their clients up-to-date on the latest market trends influencing the Japanese market. It has established a strong and lasting rapport with buying agents, developers, and local asset managers throughout the industry.

Its track record of successful projects includes Garden Terrace Ginza East, a nine-unit apartment project in Tokyo’s Ginza East neighbourhood, as well as a 36-unit apartment building in Osaka, called The Peak Tengachaya. The firm has closed investment deals for its clients, like the Gracia Hotel Shinsaibashi, a nine-key hotel in Osaka.

Firm real estate fundamentals

The Osaka projects are notable since investment interest in the city has increased in recent months. This comes from major development projects in the pipeline, such as Japan’s first casino project, which will open in the city in 2029.

There are also plans for an upcoming mega-resort complex on Yumeshima, a reclaimed island in Osaka Bay. This project will comprise hotels, conference centres, shopping malls, museums, and a new ferry terminal. This transformative project will propel the city’s growth potential over the next few years.

According to a country report by JLL, foreign investors have been actively trying to enter Japan due to its relatively favourable interest rate differentials over other key international markets. Investors deployed over US$8.9 billion ($11.7 billion) into the country’s commercial real estate sector in 1Q2023, an increase of 43% y-o-y.

FMI Japan’s flagship project Garden Terrace Ginza East, located in Tokyo’s Ginza East neighbourhood. (Picture: FMI Japan)

An investment report published by CBRE indicated that investment activity in the residential sector, where transaction volume was up 24% y-o-y in 1Q2023, was driven by foreign investors’ purchase of several major portfolios. It adds that the hotel sector logged gains of 962% y-o-y to JPY145 billion ($1.3 billion), supported by several large acquisitions by foreign investors.

On the residential leasing front, key cities like Tokyo and Osaka are returning to normalcy after a rent correction following a relatively large number of completed projects. Subsequently, rents will be buoyed by the return of overseas residents to these cities.

Foreign buying interest

Savvy investors might consider adding a prime apartment to their portfolio as the influx in demand will be mismatched by a below-average number of new residential units for rent entering the market over the next few months, the Savills report adds. These developments point to sustained demand for investment as sets in Japan from overseas investors.

FMI Japan is a partner for many family funds and Singapore-based developers who are interested in capitalising on the growth potential of the Japanese real estate market. While they recognise the investment potential, they often need more resources and a domestic network to navigate the market effectively. This is where FMI Japan can step in to facilitate them.

Chief of Homes, located on the ground floor of The Peak Namba, one of the signature projects in Osaka, provides BnB and lettings management services for FMI Japan developments. (Picture: FMI Japan)

The firm has supported clients at each stage of their investment journey. For individuals, this could mean the buying processes like getting a mortgage, understanding the rental market, and guidance through the tax implications.

Through its partnerships with Japanese developers, FMI has scaled up, adding consultancy services in project design, construction, and asset disposal for investment funds and developers. An example of its successful project development and management capabilities was the co-development of a 25-unit freehold apartment project called Shibuya Hilltop in Tokyo. FMI brought the project to Hong Kong, where it was sold out within 12 hours of the launch.

The company is well-established in the Japanese market, boasting a strong network of domestic agents and developers. It has successfully concluded deals of various sizes, from single condo investment units to multimillion-dollar investment assets. It has the backing of several domestic developers and a growing base of long-term clients and investors.

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